Globalisation Flashcards
What is globalisation?
international interconnectedness and interdependence of people with an integration of economies, where there is a fundamental transformation of economic, social, political and cultural forces
-lengthening, deepening, faster connections
What happens if there is a deeper depth of global connections?
country is more integrated
What is a throwaway society?
society strongly influenced by consumerism
What factors of globalisation lead to connections and interdependence
capital commodities information tourists migrants
How has transport and trade interlinked in the 19th and 20th Centuries until now?
- constant feedback loop
-transport has allowed trade to grow - 19th Cent Ford and other manufacturers were able to export
- innovations in transport and trade:
19th Cent steam power, railways, telephone, telegraph,
20th Cent container ships, jet aircraft
What are the four strands of globalisation?
economic, social , political, cultural globalisation
What does spec say globalisation has accelerated due to?
rapid developments in
transport,
communications
and businesses.
What has the 21st Century been dominated by leading to more globalisation (spec)?
rapid development
in ICT and global communication (mobile phones, internet,social networking, electronic banking, fibre optics),
therefore lowering communication costs and contributing to time-space compression.
What helps economic globalisation?
TNCS, tech
What helps social globalisation?
international immigration
improvement in healthcare and education
online connectivity
What helps political globalisation?
trading blocs
World Bank, IMF, WTO
BRICs
MINT
What is in Bretton Woods Agreement?
WTO, World Bank, IMF
Difference between IMF and World Bank aims?
IMF wants to stabilise the world’s monetary system
World Bank wants to reduce poverty by providing assistance
What system did IMF set up? Why?
system of fixed exchange rates with the dollar as the international currency
to ensure global economic stability
What does World Bank do?
lend money often to developing countries to reduce poverty
Controversial World Bank
SAPs
Economic before social development
What does WTO do?
helps importers/exporters trade freely and smoothly w/ rules framework for trade agreements
What are IMF, World Bank, WTO all?
IGOs
5 trade blocs
EU OPEC ASEAN Mercosur NAFTA
Who is in OPEC?
African, S American, Middle East countries
Who is in ASEAN?
SE Asian countries (clue is in name)
Who is in Mercosur
South American countries
Argentina, Brazil, Paraguay and Uruguay
Who is in NAFTA?
Canada, Mexico, and the United States
Advantages of free trade blocs
- helps developing countries
- no tariffs
- free borders
- large market
- promotes local goods
Cons of trade blocs
- hard to get out of
- loss of sovereignty
- interdependence
- comp
What does spec say national govs are key players in in terms of ….
- promoting free trade blocs
- polices (free-market liberalisation, privatisation,
encouraging business start-ups).
What does spec say WTO, IMF, World Bank have contributed to globalisation through the promotion of…..
free trade policies and
foreign direct investment
What is free-market liberalisation/neoliberalism?
-removing government control and opening up the markets to privatisation, which will lead to capitalism, and therefore wealth
Characteristics of neoliberalism
privatisation stopping regulation corruption business start up encouragement spending cuts, especially on welfare free trade integration into global economy
Why was deregulation of City of London 1986 beneficial?
made it world’s leading global hub
How is neoliberalism imposed by IMF and World Bank?
SAPs
What are SAPs?
capitalist structural adjustment loans to remove gov controls and promote neoliberalism, with privatisation and lower tariffs, but cut health spending, leading to lower health status and social development
How has China changed its attitudes and economy? dates too
- 1970 poor
- 1976 Mao died
- 1978 Deng Xiaoping introduced Open Door Policy, leading to more privatisation
- 1980 joined World Bank and IMF, as well as four SEZs, bringing in FDI
- 1990 stock markets in Shanghai and Shenzhen opened up
- so in 90s, half a billion were lifted out of poverty
Is China completely open door?
YES - foreign TNCs can invest, FDI predicted over $1 trillion
NO - banning of foreign social media, only 34 foreign films screened p/year, strict controls on foreign TNCs
How has UK gov accelerated globalisation?
tax breaks +subsidies to companies who invest (most Canary Wharf companies given this)
subsidies to foreign manufacturing companies here
Four SEZ zones China 1980
Xiamen
Shenzhen
Zhuhai
Shantou
How has China accelerated globalisation?
open door policy 1978
welcomed foreign businesses ,as it needed Western tech
biggest recipient of FDI
investing in USA, EU, Africa
What are the diff types of FDI
offshoring
foreign mergers
foreign acquisitions
transfer pricing
What is offshoring
locating overseas for cheaper costs
Example of offshoring
Fender opened plant in Mexico in 1987
What is foreign acquisition
a TNC takes over company in another country
Example of foreign acquisition
2010 Kraft took over Cadbury
What is transfer pricing?
Companies put profit in lower taxed country for lower tax
Example of transfer pricing
Starbucks and Amazon have put profits through Ireland, (low taxed)
What is the KOF Index?
measures degree of globalisation with economic, social, political indicators
What are the two indexes that measure globalisation?
AT Kearney index,
KOF index
Why is KOF Index perhaps not modern enough?
made in 1970
factors such as TV ownership are less relevant
What type of globalisation does KOF Index put most weight on and least?
social
least on political
Why does KOF Index perhaps not show USA and China as globalised and can be criticised for?
- they are more self-sufficient
- so indicators such as barriers to trade may not be relevant
Indicators in KOF Index (2 for each type)
FDI
Barriers to trade
No of Embassies
No of UN Peace missions
TV Ownership
No of Mcdonald’s Restaurants
What is the AT Kearney Index?
measures globalisation with four factors: political engagement technological connectivity personal contact economic integration
How is AT Kearney Index diff from KOF Index?
more holistic indicators, such as no of web servers rather than internet communications
Who were top 4 of AT Kearney Index 2015?
Sing.
Switz.
US
Ireland
What is the AT Kearney World Cities Index?
-a measure of how economically successful cities are
and includes TNC headquarters, museums, embassies
Who was top 4 AT Kearney World Cities Index 2016?
London
NY
Paris
HK
Why do some areas remain switched off (physical)?
- poor agriculture
- land locked (Niger)
- natural hazard vulnerable (Mozambique)
Why do some areas remain switched off (human)?
- corruption
- lack of skills deters investment
- politically isolated (NK)
- low prices for food exports due to overproduction
- ethnic clashes between tribes (DRC) hinder progress
What is a global production network? Example?
chain of suppliers of parts and materials that contribute to production of goods
Apple
Diff between outsourcing and offshoring
Outsourcing is when work is carried out in another country
offshoring is when it is overseas
How many suppliers does Kraft have for ingredients?
30,000
What is Just in Time?
companies lessen time between when product is produced, and when it is delivered, to cut costs
What is motive, means and mobility?
TNCS have shared motive to make money, and have the means to do so, and the mobility to carry goods and communicate
How have Taiwan, Vietnam, Kenya and the EU been influenced by globalisation?
- Taiwan had sweatshops in 60s due to change in gov, then increasing workers, wages, and most competitive survived (Acer), so their democracy helped them trade
- Vietnam has had Nike sweatshops so more children go school, higher wages, internal migration to South
- Kenya’s gov has meant glob. is hindered, as people can’t own land, export restrictions, black market, protectionism, sales tax, but phones have helped
- EU’s lower tariffs on Kenya’s flower exports has helped Kenya become leading flower exporter
Which two countries are good examples of how the global economic centre of gravity has shifted to Asia?
India
China
Why has Apple opened its first development centre in India?
to develop Apple Maps
high skilled yet cheap workers there
What will Apple’s new development centre in India bring?
4000 new jobs
How much of the Indian IT industry does Bangalore have?
40%
How many workers does the Indian IT industry in Bangalore employ?
nearly 10 million
Benefits of global shift to India
- less unemployment
- call centre workers paid better
- economic growth by 6%/yr
- more billionaires than UK
- inspiring young entrepreneurs, such as EKO India Financial Services
- growing middle class w/ more disposable income
Costs of global shift on India
- overcrowding
- still 60% of Mumbai in slums, who cannot work in services
- widening income inequality
What percentage of the world’s computers does China manufacture?
50%
Who is the largest recipient of FDI?
China